Presenter Information

Start Date

11-12-2016 12:00 AM

Description

Recent literature reports concerns about implausibly high Overall ratings in the sharing economy, which undermines the credibility of this rating as a quality signal. This study empirically investigates the relationship between quality and price, commonly captured by the Value dimension in multidimensional rating systems, to reveal whether reviewers form a perception of quality that they then express in the Value dimension, rather than in the Overall rating. We test our hypotheses on a comprehensive panel dataset for 14,859 Airbnb listings in New York. Our preliminary empirical findings show that an increase in price leads to a significant and substantial decrease in the Value rating, suggesting that Value ratings can offer a valuable source of information for potential buyers in addition to the supposedly inflated Overall rating. Moreover, this mechanism has substantial implications for potential buyers who seek to evaluate a listing’s quality and for a seller’s price setting.

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Recent literature reports concerns about implausibly high Overall ratings in the sharing economy, which undermines the credibility of this rating as a quality signal. This study empirically investigates the relationship between quality and price, commonly captured by the Value dimension in multidimensional rating systems, to reveal whether reviewers form a perception of quality that they then express in the Value dimension, rather than in the Overall rating. We test our hypotheses on a comprehensive panel dataset for 14,859 Airbnb listings in New York. Our preliminary empirical findings show that an increase in price leads to a significant and substantial decrease in the Value rating, suggesting that Value ratings can offer a valuable source of information for potential buyers in addition to the supposedly inflated Overall rating. Moreover, this mechanism has substantial implications for potential buyers who seek to evaluate a listing’s quality and for a seller’s price setting.